U.S. creating mostly low-wage jobs

by CalWatchdog Staff | April 17, 2012 5:19 pm

[1]April 17, 2012

By John Seiler

A couple of days ago I wrote an article, “Why pensions are going broke[2].” It showed how the massive federal and state debts are weighing down the economy, which has not grown in 13 years. Hence, there’s going to be not enough money for the generous government-sector pensions.

A liberal commentator, “Truthsquad,” said that the U.S. economy always has bounced back. I left a response there. But there’s more information.

The Huffington Post, a liberal site, just ran an article [3]about how America mainly is creating low-wage jobs. Sure, Silicon Valley and other places are creating great high-paying jobs — if your IQ is 180 and you’re a computer genius. For the rest of us, here’s what’s happening:

“Out of all OECD countries, the U.S. had the highest share of employees[4] toiling away at low-wage work in 2009, according to OECD data cited by Mark Thoma, an economist at the University of Oregon. The graph was originally published[5] in a January paper by John Schmitt, senior economist at the Center for Economic and Policy Research.

“One in four U.S. employees were low-wage workers in 2009, according to the OECD. That is 20 percent higher than in the number-two country, the United Kingdom. At 4 percent, Belgium has the smallest share of its in employees working in low-wage jobs. Low-wage work is defined as earning less than two-thirds of the country’s median hourly wage.”

Here’s the .pdf of the study[6].

And here’s a screen show I made of the graph:

[7]

Right wingers will say it’s because taxes and regulations are too high, so businesses can’t grow and make higher profits, which eventually get passed on to employees. Left wingers will say we need to raise taxes to “invest” more in education, because a better-educated workforce will produce higher-value products, thus increasing pay.

In any case, the point is that, right now, our workforce’s earning potential is stagnant or declining. And you can’t have high-dollar government pensions supported by low-dollar private-sector workers. Low-dollar workers can only support a low-dollar tax base to fund the pensions. Any fixes would work only long term.